AgroTech Companies Prepare for the Coming Decade Changes

AgroTech Companies Prepare for the Coming Decade Changes

With the goal of promoting the use of technology in agriculture, raising awareness about the benefits of technology, facilitating the marketing of AgTech services, and fostering international collaboration among companies, organizations, and funds, tech companies in the agricultural sector are seeking to form an association, starting in Chile.

The idea comes from AgroMatch. His promoter, Francisco Astaburuaga explained, “We all know how challenging it is to sell our services through digital channels, which farmers simply don’t use and don’t trust. This is an industry that has relied on trust and a network that is often tightly closed for centuries.” The association seeks to be a collaborative solution to face this reality and more challenges in the agricultural sector.

Francisco Astaburuaga, from AgroMatch and AgTech association promoter

According to data from The Yield Lab, an agri-food and technology venture capital firm, Latin America accounts for two-thirds of the world’s food surplus. By 2050, the global population is expected to increase by 2 billion people, resulting in a 60% increase in food demand.

The food and agricultural industries are among the most important globally and are poised for a complete transformation over the coming decade. This transformation revolves around three aspects:

Climate change and resource scarcity, which will require a shift toward more efficient and sustainable use of natural resources, including transitioning to regenerative agriculture and carbon-neutral production systems.

Demographic and social changes, leading to a shift towards more nutritious, healthy, sustainable, and personalized diets.

Technological advancements, with agriculture being one of the sectors ripe for digitalization, opening up opportunities not only for improved food production but also for new business models.

The Yield Lab, a venture capital firm specializing in agri-food and technology with a strong presence and experience in Latin America, has invested in high-impact companies and shared its insights on the sector’s evolution at the AgTech meeting held in Fundación Chile, Santiago.

Graciela Budinich, The Yield Lab.

“There is accelerated growth of AgriFoodTech startups in Latin America. The number of AgTech startups in the region has grown by 100% in the last five years, with over 1,600 companies today,” stated Graciela Budinich, Principal and Investor Engagement & BD Andean Region at The Yield Lab.

The firm is present in North America, Europe, the Asia-Pacific region, and South America in the AgTech and FoodTech sectors, with over $110 million in assets and investments in more than 70 companies.

“We started as an early-stage fund, investing in pre-seed and seed stage startups. Today, we have expanded our focus and made reinvestments in startups that we had initially invested in, even reaching Series B. We are a fund that is 100% focused on FoodTech, and within this field, there are different sectors of innovation where we can invest. Currently, we see significant growth in everything related to digitization and incorporating technology in agriculture, which is our primary source of investment,” added Budinich.

Within this scope, a very attractive market is AgriTech in the FinTech sector. “A major problem for farmers today is access to capital for direct investment, purchasing inputs, leasing, machinery, or hiring labor. AgriTech in the FinTech sector is a highly promising area. In fact, I would say it is the most promising startup sector in Latin America and is delivering the best returns. Another relevant area is biotechnology and its application in agriculture.”

Currently, The Yield Lab’s focus is more on digitization rather than biotechnology. This is primarily because they are a venture capital fund, and the development cycles in the digital world are much shorter compared to the scientific world, where cycles are longer and therefore more complex when it comes to investments.

Fresh fruits: high-value crops

Graciela Budinich explains, “We refer to fresh fruits as high-value crops. We mainly divide them into two categories. The ‘extensive crops’ are primarily in the Brazilian and Argentinean markets, with large cultivated areas such as corn and soybeans, among others. In Chile, Colombia, and Peru, we have ‘high-value crops’ like blueberries, cherries, stone fruits, etc., where we understand that there are different challenges and scales, and therefore, different technologies are required.”

“Particularly in Chile, we face significant water problems. One of the startups in which we have invested and is performing very well is Kilimo. They provide irrigation recommendations to agricultural producers to reduce water consumption by 20% to 30% based on the specific crop, assisting in irrigation decision-making. They are also venturing into the water credit market, selling water credits to companies not directly linked to agriculture, such as Google, Microsoft, Coca-Cola, etc., who need to offset their water footprint,” concluded Budinich.

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